epa08970573 (FILE) - A Ericsson logo is seen at the 3rd China International Import Expo in Shanghai, China, 07 November 2020 (reissued 28 January 2021). Ericsson is due to release its 4th quarter 2020 results on 29 January 2021. EPA-EFE/ALEX PLAVEVSKI
March 2 (UPI) -- The U.S. Justice Department informed Swedish telecommunications company Ericsson that it is in violation of a billion-dollar legal settlement, the company said Wednesday.
In a statement, Ericsson said the Department of Justice had informed the company on Tuesday that it had breached the terms of its 2019 settlement as a disclosure about an internal investigation into evidence of alleged corruption and possible payments to terrorists in Iraq was "insufficient" and it failed to make a subsequent disclosure following the settlement.
"The company is in communication with the DOJ regarding the facts and circumstances of the breach determination and is committed to cooperating with the DOJ to resolve the matter," Ericsson said.
Ericsson's announcement came after The Washington Post over the weekend published details of an internal probe that showed evidence of extensive fraud by company officials, decisions to send workers into territory controlled by terrorists and use of contractors who may have paid off Islamic State militants.
In its statement on Wednesday, Ericsson said the investigation "could not identify that any Ericsson employee was directly involved in financing terrorist organizations."
Ericsson President and CEO Borje Ekholm repeated the assertion in a call with reporters and market analysts Wednesday.
"The question on financing armed factions cannot be sustained," Ekholm said.
Ekholm added the findings of the internal probe were "hugely embarrassing and hugely unsatisfactory."
While he did not comment on what the company failed to share with the Justice Department, Ekholm said the company has taken steps to increase compliance efforts, improving investigative mechanisms and encouraging employees to bring wrongdoing to light, adding it is working with the Justice Department.
"We do cooperate fully with the U.S. authorities," Ekholm said. "Now we have a breach notice, so we need of course to make improvements and to change."
